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A company plans to launch two mutually exclusive projects and requires rate of return of 12 %. The cost and expected cash flows from both
A company plans to launch two mutually exclusive projects and requires rate of return of 12 %. The cost and expected cash flows from both projects are as follow. YEAR 0 1 2 3 Tesola model (50,000) 20,000 15,000 30,000 Tesola model Y (45,000) 42,000 9,000 1,850 a. Calculate NPV of both projects! (10 marks) b. Calculate IRR of both projects! (10 points) c. Based on your answers, on point a and b, which project should be accepted? (5 marks) d. Suppose that a different new firm evaluates project Tesola model X and requires rate of retum is 15%. should this firm go with the project? (10 marks)
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